Sant v. Baril

CourtMontana Supreme Court
DecidedJune 9, 1977
Docket13180
StatusPublished

This text of Sant v. Baril (Sant v. Baril) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sant v. Baril, (Mo. 1977).

Opinion

No. 13180

I N THE SUSREME COUKT O THE STATE OF MONTANA F

ARTHUR H. S N and EDNA SANT, AT

P l a i n t i f f s and A p p e l l a n t s , v.

LAURA THELMA BARIL, A s A d m i n i s t r a t r i x of t h e E s t a t e of A.R. SMITH, Deceased,

Defendant and Respondent.

And

LAURA THELMA BARIL, A s A d m i n i s t r a t r i x of t h e E s t a t e of A.R. Smith, Deceased,

P l a i n t i f f and Respondent,

ROBERT SANT,

Defendant and A p p e l l a n t .

Appeal from: D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , Honorable P e t e r Meloy, Judge p r e s i d i n g .

Counsel of Record:

For A p p e l l a n t s :

Landoe, Gary and P l a n a l p , Bozeman,Montana Robert P l a n a l p argued, Bozeman, Montana

For Respondent :

C h e s t e r Lloyd Jones argued, V i r g i n i a C i t y , Montana Douglas Smith argued, S h e r i d a n , Montana.

Submitted: March 9 , 1977

Decided : J - 9 I977 Filed: .I@ i gfi aamw 2 t"iGa".,L< -7" - Clerk. M r . J u s t i c e Gene B . Daly delivered t h e Opinion of t h e Court.

This appeal a r i s e s out of two causes of a c t i o n which were

consolidated f o r t r i a l by jury i n t h e d i s t r i c t c o u r t , Madison

County. The f i r s t cause i s a s u i t f o r damages under a land l e a s e

executed between l e s s o r s , A . R. Smith and Laura Smith, and l e s s e e

Arthur H. Sant. ' This s u i t was brought by Arthur H. Sant and

Edna Sant (Sants), a g a i n s t t h e Administratrix of t h e E s t a t e of

A . R. Smith (Administratrix). P l a i n t i f f s appeal from t h e d i s t r i c t

c o u r t g r a n t i n g defendant's motion t o dismiss, a f t e r p l a i n t i f f s

presented t h e i r case and r e s t e d .

The second cause i s a s u i t t o recover on a promissory n o t e

held by t h e F i r s t National Bank of Twin Bridges, Twin Bridges,

Montana, and executed by t h e Sants and t h e i r son, Robert Sant.

The promissory note was assigned t o t h e Administratrix and s u i t

was brought by t h e Administratrix a g a i n s t Robert Sant. The d i s -

t r i c t c o u r t t r e a t e d t h i s a c t i o n a s a counterclaim. Robert Sant

appeals from t h e d i s t r i c t c o u r t ' s order d i r e c t i n g t h e j u r y t o

r e t u r n a v e r d i c t f o r t h e Administratrix.

I n F i r s t National Bank v. Sant, 161 Mont. 376, 506 P.2d 835,

t h i s Court discussed some of t h e l e g a l problems e x i s t i n g i n t h e

present a c t i o n . A s a means of i n t r o d u c t i o n and c l a r i f i c a t i o n , we

review our holding i n t h a t case.

I n F i r s t National Bank v. Sant, supra, t h e Sants appealed

from a d i s t r i c t c o u r t judgment granting f o r e c l o s u r e on t h e i r r e a l

and personal property. This judgment of f o r e c l o s u r e was rendered

i n favor of t h e F i r s t National Bank of Twin Bridges which sought

t o f o r e c l o s e on a mortgage executed by Arthur H. Sant on J u l y 9 ,

1970, and held by t h e F i r s t National Bank of Twin Bridges. The mortgage instrument was entitled "(Plan of Paris Robert)". Paris

Robert was the president of the First National Bank of Twin Bridges.

The plan purported to relieve the Sants of ldAbility for certain

creditor debts and balances due the bank on existing notes. This

release was to be accomplished through the bank!s disbursement

of funds made available to the Sants by virtue of their executing

three promissory notes. The notes were in the amounts of $17,690.62;

$2,788.05; and $12,968.74, and each bearing interest at the rate

of ten percent per annum. Certain real and personal property of

the Sants was listed as collateral for the mortgage and $50 was charged by the bank as an expense for organizing the credit plan

and overseeing the payments. The plan was divisible into three parts with the promissory notes for $17,690.62 and $2,788.05 to mature February 5, 1971;

while the note for $12,968.74 matured on April 1, 1971. At the time First National Bank v. Sant was heard none of the promissory

had been paid by the obligors. The notes for $2,788.05 and $12,968.74 were held by the bank and no actual disbursements were made to Continental Oil Co. via Russell Lepp, or to A. R. Smith, both

listed as corresponding creditors to these notes. It is the

$12,968.74 debt which confronts us in the instant case in the form

of the July 9, 1970 promissory note and the assignment of that

note. The plan indicates the $12,968.74 debt was a consolidation of debts owed by the Sants to A. R. Smith. Specifically, these debts are listed as an old promissory note of $8,240; $728.74 in interest on this old note; and $4,000 consideration for a 1970 lease. These items are of importance later in this opinion. W held i n F i r s t National Bank v. Sant t h a t t h e bank was e

barred from foreclosing on t h e promissory n o t e s i n t h e amount

of $2,788.05 and $12,968.74 and t h e Sants were e n t i t l e d t o a

c r e d i t i n t h e amount of $1,214.32 on t h e promissory n o t e f o r

$17,690.62. The b a s i s f o r t h e $1,214.32 c r e d i t was t h e f i n d i n g

t h a t while t h e bank had charged $50 a s expense f o r s e t t i n g up

t h e plan and had charged t e n percent i n t e r e s t on t h e promissory

n o t e s , P a r i s Robert, a s agent f o r t h e bank, had s e c r e t l y negotiated

with t h e Sants' c r e d i t o r s f o r discounts o r r e b a t e s a s a c o l l e c t i o n

fee. W found t h e bank's f a i l u r e t o d i s c l o s e such n e g o t i a t i o n s e

a breach of a duty owed t h e p r i n c i p a l by h i s agent and held t h e

Sants e n t i t l e d t o t h e amount of t h e r e b a t e s , $1,214.32.

The b a s i s f o r denying t h e bank f o r e c l o s u r e on t h e $2,788.05

and $12,968.74 promissory n o t e s was t h e f i n d i n g t h a t t h e n o t e s

were n o t supported by l e g a l consideration. For example, t h e

$12,968.74 promissory note was purportedly executed t o evidence

debts owed by t h e Sants t o A . R. Smith. However, t h e promissory

n o t e was d r a f t e d and held by t h e F i r s t National Bank of Twin

Bridges and executed by t h e Sants and Robert Sant. Since t h e r e

has never been a showing of any o r a l o r express t r u s t , p a r t n e r s h i p ,

agency, j o i n t venture o r o t h e r such r e l a t i o n s h i p between A . R.

Smith and t h e bank, t h e promissory note i s void f o r t h e purpose of

e s t a b l i s h i n g t h e $12,968.74 debt between A . R. Smith and t h e Sants.

The only evidence of any agency r e l a t i o n s h i p i s t h e penciled words

"A.R.Smith Trust" which emboss t h e promissory note and were a l l e g e d l y

w r i t t e n by P a r i s Robert. I n F i r s t National Bank v. Sant we s e t

f o r t h those policy reasons which d i r e c t e d why such evidence should

not be equated with an express o r o r a l agreement c r e a t i n g a p a r t n e r -

s h i p , agency, o r t r u s t r e l a t i o n s h i p and, though we r e f r a i n from

repeating those policy reasons h e r e , we a f f i r m t h e b a s k f o r t h a t

holding . - 3 - W note t h a t F i r s t National Bank v.

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